Rice Milk – A volte-face or a disappointment in the offing!

The rice milk market is estimated to grow at a CAGR of 17.17% and poised to reach US$ 2,619.954 million by 2024, from US$ 1,012.838 million in 2018. The expanding interest in gastronomic pursuits and interested in experimentation has resulted in a perceptible trend in food and beverage innovation that is augmenting customers' preference of shifting away from the traditional milk and dairy-based products. For instance, Woolworth Food's Organic Rice Milk, which was launched in December 2019 is made of organic rice, organic vegetable oil, sea salt, and water. It also has relatively low-fat content, no saturated fat or cholesterol and is rich in Vitamin B and carbohydrates. This also serves as an example, like many others, of businesses adapting to consumers growing preference for functional beverages as well as moving away from traditional milk due to growing health concerns associated with milk. Moreover, the APAC region that is primarily a market for consumers of soy milk due to their lactose intolerance makes it a stark opportunity for the rice milk market.

The Environmental Imperative of Value-Driven Consumers

The other factor that is leading to a surge in rice milk production is that of growing environmental concern, about bovine milk production. The estimated global variation of 1 liter of milk production with regards to green-house-gas (GHG) emissions is between 2 to 4 kgs carbon dioxide equivalents (CO₂eq). With regards to the terrestrial acidification, 1 liter of milk production amounts to more than 30 grams of sulfur dioxide equivalents (g SO₂eq) and leads to eutrophication to the tune of 20 grams of phosphate (g SO₂eq). The growing awareness of the environmental impact that is associated with highly resource intensive dairy production is thus fueling the inevitable growth of plant-based alternatives to milk like rice milk, since large proportion of consumers are value-driven individuals who have along with the traditional dimensions of food and beverages like convenience, identity, taste, and value have added to other dimensions mainly that of benefits and ethical values.

The Emergence Plant-Based Players In APAC Region

Apart from actively communicating the environmental credentials, players in the market are increasingly partaking in the plant-based foods sector as consumers in the emerging economies are more inclined to adopt newer varietal of plant-based drinks such as rice milk.  The abundance of raw materials in the APAC region is estimated to further propel the growth of the market.  Further, due to the emerging preference of functional beverages, a greater number of players are entering emerging as well as strong economies. There is also diversification into the plant-based milk category. This would lead to significant growth of the Rice Milk Market. The established and ever-expanding distribution networks are projected to further catalyze the growth of the rice milk market.  For instance, the Vietnam Dairy Products Joint Stock Company that is also known as Vinamilk, in 2019 introduced a rice milk brand called Vinamilk Zori. It is a beverage made from roasted rice, with less sugar and is fortified with various vitamins. The company has also effectively localized its brand for Chinese consumers and is called Yuenamiao.

The Expanding Plant-Based Beverage Product Mix And Plausible Substitutes

The rice milk market is estimated to be met with a growing number of substitutes since plant-based alternatives are poised to become a staple in every household across several markets and are not restricted to the diets of vegans, only. Besides, rice milk there appears to be a profusion of other plan-based products. Moreover, consumers’ aspiration for variety, novelty, and willingness to experiment are a few key reasons that are propelling the emergence of plant-based drinks other than rice milk. In 2019, Chobani, the widely recognized American yogurt brand announced that it would start selling oat-based drinks. Other players in the oat milk segment are Danone’s Silk, Oatly and Planet Oat.

Further, the plant-based market is not saturated which paves the way for more alternatives to rice milk. In view of above Elmhurst switched to producing a variety of plant-based milks from almond, cashew, hazelnut, oat, and walnut after being 92 years in dairy. Califia Farms known for its range of plant-based milks that are inclusive of but are not limited to that of coconut and almond milk raised $50 million round of capital in the year of 2018 led by Ambrosia Investments.  Another Californian coconut milk-based brand called REBBL raised US$20 million in funding.

 

Type	Products
Cereal based	Corn milk, Oat milk, Rice milk, Spelt milk
Legume based	Peanut milk, Lupin milk, Cowpea milk.
Nut based	Almond milk, Coconut milk, Hazelnut milk, Pistachio milk, Walnut milk
Seed based	Flax milk, Hemp milk, Sesame milk, Sunflower milk.
Pseudo-cereal based	Amaranth milk, Quinoa milk, Teff milk.

Table 1Available Rice Milk Substitute

Opportunities

The rising preference of a vegan diet is also a significant factor contributing to the meteoric adoption of non-dairy alternatives, which in turn provides a significant opportunity for rice milk this poses even beyond the forecast periods. One such alternative is that of rice milk. Presently consumers are proactively moving away from the bovine milk towards rice milk mainly due to milk protein allergy, lactose intolerance, cultural influences, etc.  This has enabled beverage processors and marketers to capitalize on the growing consumer preference for rice milk and increase their portfolio of lactose-free milk brands. Further, countries, where consumers are mostly lactose-tolerant, is turning towards rice milk, as well.  In light of the above, in 2017, Danone (Euronext: BN) acquired American WhiteWave Foods for a deal, worth US$12.5 billion, which among others, generated 38% of its sales from plant-based foods and beverages according to a certain forward-looking statement published by Danone. Further, the Dairy Farmers of America (DFA) in 2019 reported net sales of US$13.6 billion for 2018, compared to US$14.7 billion in 2017, which is a decrease in7.5%.